Ahead of the international climate negotiations in Glasgow, one of the world’s largest oil producers committed to reaching net-zero emissions by 2060.
Saudi Arabia’s announcement, on its face, would seem to be a dramatic development, tying the iconic oil producer to a clean energy future. But as is the case with so many “net zero” announcements, the details are murky at best.
Saudi’s 2060 target
A week before the COP26 talks kick off, Crown Prince Mohammed bin Salman said that Saudi Arabia would achieve net zero emissions by 2060, a notable announcement given the fact that the country obtains an overwhelming portion of its GDP and government revenue from exporting oil.
Crown Prince Mohammed bin Salman said that Saudi Arabia would achieve net zero emissions by 2060.
In an effort to put the country on the net zero pathway, MbS said that Saudi Arabia would invest $180 billion to overhaul its economy.
While the news is a welcome development in global efforts to slash carbon emissions, the announcement from Riyadh comes along with several very large caveats.
First, the 2060 target is a decade later than most of the policies agreed to by more than 100 countries, although it would be in line with China’s target.
Second, and more importantly, the net zero commitment would only apply to Scope 1 and 2 emissions – those that occur inside the country. It would ignore the emissions related to the oil that is exported and burned elsewhere.
But even slashing its own emissions to zero would appear to be significant. The country sources 99 percent of its electricity from fossil fuels, and on a per capita basis, emits as much greenhouse gases as the average person from the U.S. It will need to ramp up renewable energy to green its grid, transforming its economy, although it has plenty of sunshine to work with.
At The same time, however, not only is the target underwhelming, but Riyadh also seems to be working at cross purposes. Saudi Arabia was one of a handful of countries that is seeking to water down the COP26 talks.
Government submissions that inform the technical consensus published by the Intergovernmental Panel on Climate Change show that Saudi Arabia and a half-dozen other governments are attempting to weaken the language of the report. According to documents obtained by Unearthed and shared with BBC News, Saudi Arabia, along with Japan, Australia have been pressuring the UN to downplay the global call to move quickly away from fossil fuels.
For example, as BBC News reported, an adviser to the Saudi oil ministry demands “phrases like ‘the need for urgent and accelerated mitigation actions at all scales…’ should be eliminated from the report.”
To be sure, Saudi Arabia was not alone. Australia sought to weaken the consensus about moving away from coal-fired power generation, for example, while Norway argued aggressively for carbon capture and storage as opposed to phasing out fossil fuels.
Publicly, Saudi Arabia has consistently warned against the global call for an end to new fossil fuel projects, linking climate negotiations to the current spike in energy prices. While the oil market is indeed going through turmoil, part of the reason for that is the fact that OPEC+ — of which Saudi Arabia is the most powerful member — is curtailing supply.
More broadly, however, a temporary mismatch between supply and demand should not lead to weaker climate ambition, which would ratchet up the odds that we experience increasingly catastrophic climate change. Energy analysts predict that the oil market will shift from a temporary deficit to a supply surplus as soon as the end of the first quarter of 2022. Should the world water down climate policies just because oil prices have climbed, which is in part the result of Saudi oil policy to restrain output?
Saudi Arabia to increase production
The few details that MbS offered in his climate announcement was a suggestion to plant 450 million trees and rehabilitate 20 million acres of land. Tree-planting to offset carbon is riddled with problems, including complex and shaky carbon accounting, and is a questionable climate solution.
The main source of supposed emissions reductions for Saudi Arabia would presumably come from some form of carbon capture and storage, along with nascent plans to develop blue hydrogen. Blue hydrogen, derived from natural gas, is distinct from green hydrogen, which is made from renewable energy. Blue hydrogen is expensive, and both its climate impact and its commercial viability is dubious, as it requires costly carbon capture technologies. The entire concept is unproven.
“We are the biggest adventurers when it comes to blue hydrogen.”
“We are the biggest adventurers when it comes to blue hydrogen,” Prince Abdulaziz said at a climate conference in Riyadh a few days ago when announcing a major new gas development project called Jafurah. “We’re putting our money where our mouth is on hydrogen. We have a terrific gas base in Jafurah we will use it to generate blue hydrogen.”
But Aramco said that blue hydrogen production would not begin until after 2030. In the short run, then, there is very little climate policy on offer.
Meanwhile, in a private meeting with clients of Bank of America, Saudi energy minister Prince Abdulaziz bin Salman said that his country would pump “every molecule” of its oil and gas reserves, according to the Wall Street Journal.
Saudi Aramco is dedicating virtually its entire $35 billion capex budget this year to increasing oil and gas production, and last year it announced long-term plans to scale up production capacity to 13 million barrels per day. Saudi Arabia is currently producing a little over 9.5 million barrels per day, with a few million barrels per day sitting on the sidelines.
Sparse details for emissions reductions, Aramco’s plans for expansion, and the vow to produce oil until the Saudi desert is empty, certainly raises some questions about the sincerity of its pledge to achieve net zero emissions.
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